OFHEO Move Will Alleviate Credit Crunch, Improve Housing Market
The National Assn. of REALTORS believes giving Fannie Mae and Freddie Mac more flexibility to address problems in the mortgage market will benefit the housing market. In providing the ability to make a two percent adjustment to the portfolio limit formula for Fannie Mae, like Freddie Mac currently has, OFHEO has provided another tool to help borrowers with more subprime loans and others having problems refinancing their mortgage.
"Every day, REALTORS see firsthand with their customers and clients that the mortgage market has not fully improved from the turmoil that began earlier this year," said National Association of REALTORS President Pat V. Combs (shown at right). "Director Lockhart’s actions today send an important signal to America’s homeowners and buyers that the government recognizes that there is a major problem and that it is willing to act."
"It really is becoming a better time to buy a home ... actions by both houses of Congress to reform FHA programs, and the Federal Reserve to decrease interest rates, should make borrowing more affordable and money more available. With reduced housing prices and increased housing inventory, interest rates that are near historic lows, and now with Fannie’s and Freddie’s increased ability to lend, we may see positive movement in the housing market," said Combs.
On August 13, NAR joined with the Mortgage Bankers Assn. and the National Assn. of Home Builders in asking Director Lockhart to approve a temporary increase in the portfolio caps for Fannie Mae and Freddie Mac to meet urgent credit needs, consistent with safety and soundness. "Congress should act now to increase Fannie Mae’s and Freddie Mac’s conforming loan limits to help borrowers in higher cost areas who are finding it extremely difficult to secure affordable financing. This would have the effect of making more money available for more of our nation’s borrowers," said Combs.